Kyobo Life, a government-backed insurance operator, will trial the first real-world implementation of blockchain technology for commercial insurance money payments in Seoul this year.

Two weeks ago, Seoul-based life insurance company Kyobo Life Insurance was officially selected by the government as an operator of the government`s pilot, according to a local publication in businesskorea.co.kr.

“This is the first case where the insurance industry is fully connected with fintech and introduces a new service.”, said Kim Wook, a senior managing director of digital innovation at Kyobo Life.

“If the service is commercialized in the future, we will be able to provide a better service by utilizing various fintech technologies.”, he added.

The role of Blockchain

For the time being, the policyholder pays medical costs to the hospital first, before receiving documentation of these costs in case of a medical insurance claim.

The medical data is not immediately accessible by insurance companies because there is a possibility of data breaches. A blockchain platform could be the solution as it may reportedly provide both respite and data security.

Thus, a blockchain platform may become a bridge between the insurer and the hospital and improve the efficiency of the process. Apart from this, it could reduce the time taken for payments.

Kyobo Life has announced its plan to sign deals with a number of hospitals in Seoul`s metropolitan to start the pilot project by the end of 2017.

If the trial is successful, the insurance operator plant to commercially expand the blockchain system to large hospitals in the country in an effort to cover all of its policyholders.